HPP GJANC – EXPALANATORY NOTES FOR FINANCIAL OFFER
Table of Contents
Abbreviations .......................................................................................................................................... 2
1. Short Background Information ........................................................................................................... 3
2. Legal Notes .......................................................................................................................................... 4
3. General Technical Data ....................................................................................................................... 4
4. Production and Financial Data ............................................................................................................ 4
5. Production after Intake Channel Rehabilitation ................................................................................. 5
6. Connection with Grid .......................................................................................................................... 5
SPAHIU-GJANC shpk
Address: Rr. Brigada VIII, Godina Nr.1, Sh.2, Ap.10, Tirana, Albania; Tel/Fax: 00355 42 58 562; email: [email protected]
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Abbreviations
KESH - Albanian Power Corporation
ALL - Albanian Lek
ERE - Energy Regulatory Entity of Albania
ROT - Rehabilitate, Operate, and Transfer
SPAHIU-GJANC shpk
Address: Rr. Brigada VIII, Godina Nr.1, Sh.2, Ap.10, Tirana, Albania; Tel/Fax: 00355 42 58 562; email: [email protected]
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HPP “GJANC” - EXPLANATORY NOTES FOR FINANCIAL OFFER
The following are the main characteristics and data for HPP Gjanc in its current status; also taken into
consideration the increase in water supply capacity.
1. Short Background Information
 HPP Gjanc was built during 1988-1991 and was put into operation in 1991 as state property
administered by the Albanian Power Corporation (KESH).
 HPP Gjanc was given in concession in 2003 to Spahiu-Gjanc Ltd for a period of 30 years.
 The concessionaire (Spahiu-Gjanc Ltd) in the period 2003-2007 has invested in the full technical
rehabilitation of the HPP
Water supply scheme for HPP Gjanc
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Rehabilitation of 1.7 km of intake channel from tunnel to pressure basin
Rehabilitation of pressure basin
Refurbishment of penstock
Civil works on the Powerhouse
Overhaul and commissioning of the turbine-generator set (in Austria), axial and radial bearings
Change of cooling scheme and protection system
Installation of new automatic set (excitement, synchronization, control).
 The technical rehabilitation has been implemented having subcontractors; Kossler Gmbh (part of
Voith Siemens -mechanical side) and Schubert Gmbh (electrical side) from Austria, using Siemens
PLC/SCADA system.
 From 2005 to date technical parameters are also monitored online from Kossler Gmbh company,
(St. George, Austria) based on a multi-year contract that includes yearly inspections of the technical
state of HPP.
 In the period Mid, 2011 to August, 2012 the water intake channel from the intakes to the reservoir
and the tunnel after reservoir were rehabilitated increasing water flow from 2.5 m3/s up to 5.5-6
m3/s, achieving so initial design goals laid out in the construction project in 1970.
 There exists the possibility to build a new connection channel (part of it) to obtain flow from
another intake source which will increase production with another 3 million kWhr/annum, at a cost
of 500 thousand euro.
 For photos of the HPP please check the Panoramio link: http://www.panoramio.com/user/6554143
SPAHIU-GJANC shpk
Address: Rr. Brigada VIII, Godina Nr.1, Sh.2, Ap.10, Tirana, Albania; Tel/Fax: 00355 42 58 562; email: [email protected]
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2. Legal Notes
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Albanian energy market is liberalized
HPP Gjanc given in concession to Spahiu-Gjanc Ltd for a 30 years period (starting in 2007)
The concession is in ROT form (Rehabilitate, Operate, and Transfer)
After the end of concession period the concessionaire has the initial rights for purchasing the plant
with entering bid procedure (or extending the concession period).
Spahiu-Gjanc Ltd is the sole proprietorship of Mr. Dalip Spahiu, who also operates in other
business activities
The Albanian legislation provides a regulated annual energy purchasing price for the concessionary
(Spahiu-Gjanc Ltd) set by Energy Regulatory Entity of Albania (ERE)
Legislation allows the transfer, partially or complete packet of shares/quotas without changes in
the designation of the concession company.
The concessionary contract together with its assets has been registered to the Albanian Office of
Real Estate Properties.
Spahiu-Gjanc ltd has a 15 year long contract with KESH until 2026 for sale of its energy production
(sale price for 2012 was 7.77⁸ ALL/kWhr).
Spahiu-Gjanc ltd since 2012 is the co-manager (together with the Irrigation Board of Korca) and the
sole maintainer of the reservoir of Gjanc.
The company has all necessary permits to conduct its energy production activity and water usage
permits from Gjanc reservoir from relevant Ministries and Authorities.
3. General Technical Data
 Installed capacity (S): 3700 kVA
 Installed active power (P): 2960 kW
 Installed turbine type: Francis
 Delta Height (H): 125 meters
 Reservoir capacity: 18 million cubic meters
 Number of permanent employees: 11
 Annual operation period (prior -> after rehabilitation of water intake channel): 6 to 8 months –> 8
to 10 months
4. Production and Financial Data
a) Annual average production (prior -> after rehabilitation of water intake): 6-8 million kWhr –> up
to 14.5 million kWhr long term average production (as projected on the feasibility study of the
intake channel rehabilitation and based on data from many years observations on the site; water
flow)
 Production in 2010 was 8.6 million kWhr
 Production in 2011 was 5 million kWhr (intake channel started rehabilitation)
 Production end of 2012 (from April to December) in 8.8 million kWhr (intake channel
rehabilitation finished in August, 2012)⁶
 Production in February, 2013 in 600 thousand kWhr
 Plant at the moment is in production state (March, 2013)
 Reservoir of Gjanc has at the moment 14 million m3 stored (March, 2013)
 According to water flow measurements in the period 15 March – 30 May the flow supply is
SPAHIU-GJANC shpk
Address: Rr. Brigada VIII, Godina Nr.1, Sh.2, Ap.10, Tirana, Albania; Tel/Fax: 00355 42 58 562; email: [email protected]
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at 6 m3 /s and higher
b) General Annual Costs:
 Staff salaries, social insurance payments: 7.763.000 ALL
 Depreciation: 8.200.000 ALL
 Tax (corporate tax): 1.200.000 ALL
 Maintenance costs: 5.040.000 ALL ¹
 Other expenses: 1.200.000 ALL
c) Annual income:
 From the sale of energy 2010: 64,500,000 ALL without VAT (VAT is 20%)
 From the sale of energy 2011: 37,900,000 ALL without VAT
 From the sale of energy 2012: 62,160,000 ALL without VAT⁷ (period April – 10 December,
2012)
*KESH sale price3 = 7.77 ALL per kWh in 2012 (price has evolved from 2004 being 4.6 ALL/kWhr to 7.77
ALL/kWhr in 2012)
o At the concession time state owned HPP assets (2003) were estimated at 1 million and 261
thousands USD.
o Spahiu-Gjanc Ltd during 2003-2005 has invested 1.021 million Euros for the rehabilitation of the
HPP (certified by Ministry of Energy METE).
o In period 2011 – 2012 Spahiu-Gjanc Ltd invested 1.27 million Euros for the rehabilitation of water
intake channel (Intesa San Paolo Bank Albania)
o HPP Gjanc owns more than 2300 square meters of land.
o In the concession contract for HPP Gjanc there is no concession fee compared with other
concessionary contracts granted after 2005.
Albania is a country with certain degree of macro-economic stability; inflation is under control of Bank of
Albania at the level of 2 to 4 percent. This level is also projected for the period until 20205.
5. Production after Intake Channel Rehabilitation
The project implementation for the rehabilitation of the water intake channel predicts this increase in
performance:
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Increase of production period per year by at least 2 months
Production at higher capacities from the generator-turbine set
Increase in production by around twice to prior rehabilitation production of intake channel
Achieves operational parameters as projected in the project initial design in 1970
6. Connection with Grid
o Within the territory of HPP Gjanc there is a 35/10 kV substation (owned by the Distribution
SPAHIU-GJANC shpk
Address: Rr. Brigada VIII, Godina Nr.1, Sh.2, Ap.10, Tirana, Albania; Tel/Fax: 00355 42 58 562; email: [email protected]
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Operator)
o Increase in production due to the investment in the intake channel does not require additional
investments for connection with grid
o HPP Gjanc is located 15 km away from the 400 kV substation that connects it to the international
grid (Albania – Greece 400kV transmission line).
Based on the above laid data, a negotiable price in the margin of 2 - 2.1 million Euro per MVA is set for the
sale of HPP Gjanc.
Tirana, March 2013
Spahiu-Gjanc Ltd
¹This is the projected expenditure for maintenance in the rehabilitation report, however from 2005 until today no expenditure of this size has
been spent for maintenance. Annual maintenance costs are in fact much lower.
² The energy produced on December is being billed on the next year
³ The price is corrected by ERE taking into consideration the previous year inflation rate; price for 2010 was 7.5ALL/kWhr; for 2011 was
7.58ALL/kWhr
⁴ Formally declared for taxation purposes
⁵ As per IMF estimations
⁶Bear in mind that for 2012 HPP started production in 20th of April and rehabilitation of intakes was continuing so operation was not at full
capacity
⁷VAT in Albania is at 20%
⁸Exchange rate of ALL to USD in May, 2013 is 1USD = 107.5 ALL / with Euro is 1 EUR = 140.9 ALL
SPAHIU-GJANC shpk
Address: Rr. Brigada VIII, Godina Nr.1, Sh.2, Ap.10, Tirana, Albania; Tel/Fax: 00355 42 58 562; email: [email protected]
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